Belfast Telegraph

Manufacturing output reaches two-and-a-half year high

By Ben Woods

Output in Britain's manufacturing industry has started the new year on a "strong footing" after unexpectedly leaping to a two-and-half-year high at the end of 2016.

The closely-watched Markit/CIPS UK Manufacturing purchasing managers' index said output hit 56.1 in December, up from 53.6 in November and above economists' expectations of 53.3.

A reading above 50 indicates growth.

The move was driven by the Brexit-hit pound, which continued to boost demand by making UK exports cheaper on the international market.

However, the double-edged sword of sterling's slump means cost pressures are still high, the report said, with rates of inflation "remaining among the highest seen during the survey history".

Rob Dobson, senior economist at IHS Markit, said the plunge in the pound had "undoubtedly been a key driver of the recent turnaround, while the domestic market has remained a strong contributor to new business wins".

However, earlier this year the head of Manufacturing NI said the benefits from the fall in sterling were not being enjoyed to the same extent in the Northern Ireland sector, where there are fewer manufacturing exporters.

Stephen Kelly said manufacturers in Northern Ireland were also seeing "higher input costs" as most of their products are sold at home and in Britain.

The pound was up against the dollar following the manufacturing update, rising 0.1% versus the greenback at 1.229.

Sterling was also 0.8% higher against the euro at 1.181.

Belfast Telegraph